The past year has been particularly important for Paddy Power Betfair as the gambling operator has made its first steps as a merged entity. And judging by its quarterly results, it could be said that the consolidation between Paddy Power and Betfair, two companies with multi-channel presence in the gambling industry and footprint in key markets, has proved to be a positive move, for now at least.
Paddy Power Betfair came to being on February 2nd, 2016 from the £5-billion merger of the above gambling companies. During its first quarter as a merged business, the company generated overall revenue of £339 million, boasting excellent performance across all divisions and double-digit growth as compared to the three months ended March 31, 2015. Second-quarter revenue increased to £420 million. Revenue for this year’s third quarter decreased slightly quarter-over-quarter but increased on a year-to-year basis to £404 million.
Paddy Power Betfair operates four divisions – an online business, a retail division, as well as businesses in Australia and the US.
Online revenue for the first quarter of the year totalled £195 million, up 17% year-on-year. The company said that the increase was driven, to a great extent, by a rise in sportsbook stakes. Online revenue during the second quarter reached £245 million. Third-quarter revenue stood at £222 million, down from the previous quarter but up from the prior-year period.
Revenue from Paddy Power Betfair’s retail business amounted to £67 million during the first quarter of 2016, up 5% from the same period of the previous year. It rose to £80 million in the second quarter and to £76 million in the third quarter.
In Australia, Paddy Power Betfair generated £58 million during its inaugural quarter as a merged entity, up 25% year-on-year. The second quarter brought in revenue of £71 million, or a significant increase from the preceding three-month period. No exact figure was posted for the company’s third-quarter Australia revenue, but it said that a significant year-on-year rise had been registered.
First-quarter US revenue amounted to £20 million, up 22% from the same three months of 2015. During the second quarter, the figure more than doubled to £43 million. US revenue then dropped to £24 million in the third quarter (on a quarter-over quarter basis).
To sum up Paddy Power Betfair’s operations, the company currently runs the Paddy Power and Betfair online gambling brands across Europe, the Sportsbet online betting brand in Australia, the Betfair Casino and the Betfair New Jersey Exchange in the US state of New Jersey, and over 600 betting shops across the UK and Ireland.
As it could be seen from the figures posted, the second quarter was notably the company’s best. And this should not be a surprise, particularly given the fact that the greater portion of the UEFA Euro 2016 took place within the three months in question. Gambling operators traditionally enjoy better results during major sports forums as betting activity is understandably bigger.
Paddy Power Betfair penned several strategic agreements during the nine months ended September 30 and the two months after that. They were all aimed to boost the company’s both retail and online offering.
In May, the gambling operator’s online brands went live with gaming content by HTML5 software developer CORE Gaming. It is interesting to note that more than a decade ago, Paddy Power became the development studio’s first client.
Under an agreement between Betfair US and Monmouth Park Racetrack in New Jersey, the gambling operator began providing exchange wagering options to state residents. Betfair’s exchange wagering product was first launched in the early 2000s in Europe and quickly became popular in the UK and other jurisdictions.
During the reported nine months, Paddy Power also extended its existing partnership with Virtual Sports provider Inspired Gaming. Under the newly signed three-year distribution agreement, the gambling operator saw Virtuals content go live across its network of licensed betting offices (LBOs) across the UK and Ireland.
To further boost its retail operations, Paddy Power also approached Swedish gaming developer NetEnt. Under a content distribution partnership the two businesses signed in November, the internationally recognized provider would supply casino games to Paddy Power’s LBOs. This was a second UK land-based deal for NetEnt.
Figures from the past quarters show that Paddy Power Betfair is up to a stable growth as a merged entity and is actively working towards expanding its portfolio and footprint. Being one of the recent products of the ongoing consolidation in the gambling industry, the operator, similarly to its counterparts, is looking to maintain competitiveness in a highly competitive environment. It seems that it has taken proper measures to secure its good positions in the market, at least for now.
- Author
Olivia Cole
